Communists gone but inflation remains

Jan. 15, 2013, 10:55 a.m.

In a news item in The Courier (1974), in a report on a speech by the then federal country party leader Doug Anthony in Ballarat, Mr Anthony is quoted as saying "The communist understands that a nation whose economy is undermined by inflation, and a nation in which the fabric of society is damaged by inflation and by industrial strife inflation brings, and by the lowering of standards and values, is a nation on the way to domination by others".

In a news item in The Courier (1974), in a report on a speech by the then
federal country party leader Doug Anthony in Ballarat, Mr Anthony is quoted as
saying "The communist understands that a nation whose economy is undermined by
inflation, and a nation in which the fabric of society is damaged by inflation
and by industrial strife inflation brings, and by the lowering of standards and
values, is a nation on the way to domination by others".

Strong words Mr
Anthony - but you were in opposition at the time, weren't you? (It is
interesting how truths emanate from the mouths of politicians when they are in
opposition).

Mr Anthony's words did not translate into action because,
following the Liberals' election victory in 1975, inflation continued, and has
done so to the present day.

Indeed, there is only one period since
federation when inflation has been constructively dealt with, and that was the
period from 1943 to 1946 inclusive, when, during the period of the Labor
government led by John Curtin, some of the money (in the form of financial
credit) which was created and issued by the Commonwealth Bank, was used to
reduce prices at the retail level, beginning with items used to compute the
consumer price index.

This action eliminated inflation - it brought the CPI
down by one point. Former Prime Minister Fraser commented that this system
(consumer price discounts) "had merit".

During the period of the Fraser
government, no indication was apparent, as far as giving this previously
successful policy a try was concerned.